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Tuesday, May 1, 2012

Obama Fails to Stem Middle-Class Slide He Blamed on Bush

Barack Obama campaigned four years ago assailing President George W. Bush for wage losses suffered by the middle class. More than three years into Obama’s own presidency, those declines have only deepened.

The rebound from the worst recession since the 1930s has generated relatively few of the moderately skilled jobs that once supported the middle class, tightening the financial squeeze on many Americans, even those who are employed.

“It started long before Obama, but he hasn’t done anything,” said John Forsyth, 58, a railroad-car inspector and political independent from Lebanon, Ohio. “He kept pushing this change, change, change, and he hasn’t done anything.”

Underlying the erosion of the middle class, defined by some economists as the middle 60 percent of income earners, are trends that stretch back decades, including competition from lower-wage workers overseas and technological advances that allow factories and offices to produce more with less labor.

As a candidate in 2008, Obama blamed the reversals largely on the policies of Bush and other Republicans. He cited census figures showing that median income for working-age households -- those headed by someone younger than 65 -- had dropped more than $2,000 after inflation during the first seven years of Bush’s time in office.

Yet real median household income in March was down $4,300 since Obama took office in January 2009 and down $2,900 since the June 2009 start of the economic recovery, according to an analysis of census data by Sentier Research, an economic- consulting firm in Annapolis, Maryland.

1% Get 93%

A president who attacked Bush’s policies for favoring the rich has overseen a recovery in which the wealthiest 1 percent captured 93 percent of per-capita real income gains in 2010, according to an analysis of tax data by Emmanuel Saez, an economics professor at the University of California at Berkeley.

On average, families in the top 1 percent saw their inflation-adjusted incomes rise by $105,637 that year from 2009, according to Saez.

While there is no settled definition of middle class, the middle 60 percent of households nationwide in 2010 earned between $20,000 and $100,000, according to the U.S. Census.

In and around Dayton, Ohio, a region that has endured a wrenching shift from dependence on the auto industry to new sources of growth such as distribution warehouses and information technology, disappointment with Obama is often balanced by wariness of his Republican challenger, Mitt Romney.

“I don’t know if there’s anybody I’m going to vote for,” Forsyth said of the candidates.

Limited Opportunity

While the U.S. unemployment rate fell from a peak of 10 percent in October 2009 to 8.2 percent in March, the jobs data that dominate public discussion obscure a shift that has limited opportunity for workers such as Forsyth

Ninety-five percent of the net job losses during the recession were in middle-skill occupations, such as office workers, bank tellers and machine operators, according to research by economists Nir Jaimovich of Duke University in Durham, North Carolina, and Henry Siu of the University of British Columbia in Vancouver.

The job growth since has been clustered in either high- skill fields inaccessible to workers without advanced education or low-paying industries, they found.

In March, 3.2 million fewer Americans held sales and office jobs than five years earlier, and 1.2 million fewer were employed in transportation and production fields, all areas that typically pay middle-income wages, according to the Bureau of Labor Statistics.